Cash-strapped Trada Maritime Risks Default

Indonesian shipping company PT Trada Maritime Tbk is at risk of defaulting on its debt of around $31 million to the International Finance Corp (IFC), the private sector lending arm of the World Bank.

Trada Maritime received a letter dated May 28 from the IFC requiring it to pay a principal amount of $30.57 million as well as interest and other costs of $774,360 within three working days, the company said in a stock exchange filing on Thursday.

Trada Maritime also owes $15 million to Bank of Tokyo-Mitsubishi UFJ Ltd. The company had discussed ways to pay off its debt to its creditors and they will have another meeting on June 17, it said.

The potential for default underscores the plight of the Indonesian shipping sector, which has been struggling with a heavy debt burden, oversupply and lackluster rates.

Last month, the chief of unlisted PT Pelayaran Nasional Indonesia was replaced after the state-owned shipping company suffered a loss in 2013, local media reported.

Oil and gas shipping firm PT Berlian Laju Tanker, which narrowly escaped bankruptcy last year, said in January it had cut its fleet size by 44 percent and will transfer a stake in its subsidiary to one of its creditors.

(By Fransiska Nangoy;